Last Thursday (June 4), the U.S. Senate Committee on Foreign Relations conducted a hearing with the self-explanatory title of “Challenges and Opportunities for U.S.-China Cooperation in Climate Change.” An all-star trio of China hands provided testimony: Kenneth Lieberthal of University of Michigan and visiting fellow at Brookings Institution, Elizabeth Economy of Council on Foreign Relations and Bill Chandler of the Carnegie Endowment of International Peace. Although actual testimony (except perhaps Lieberthal’s) did not track the prepared testimonies that are accessible in the preceding links, they are all well researched and reasoned and worth the read. [Update: Video of actual testimony available here]

Senator John Kerry, the chair of the Committee, set the context for the session in his opening statement:

Last week, I visited China to assess where the country currently stands on climate and energy issues, and to explore opportunities for cooperation going forward. I met with top Chinese political leaders, energy executives, scientists, students, and environmentalists. What I heard and saw was enormously encouraging. Chinese decision-makers insisted to me repeatedly that China now grasps the urgency of this problem. People who, a few short years ago, weren’t even willing to entertain this discussion, are now unequivocal: China is eager to embrace low-carbon development pathways and is ready to be a positive, constructive player in negotiations going forward.

The question is how.

How can we believe you?

Rather than provide a thorough summary of the proceedings, I will focus on what I thought was the key message that lays at the core of Economy’s testimony, but was also touched upon by Lieberthal and Chandler-the need for measurable, reportable and verifiable (MRV) actions (<–very helpful WRI report, btw), as called for in the Bali Action Plan. In Economy’s words, MRV is “the very building blocks of an effective domestic climate program for China as well as China’s commitment to a robust international [climate] regime.”

But Lieberthal was realistic about what China could commit to in Copenhagen, saying:

At Copenhagen, China should be pushed hard to accept targets for greenhouse gas emissions that require major efforts to achieve. Beijing should also accept full verification requirements, which include transparency, clear metrics, etc. But China will, in my judgment, not accept caps at this point. It does not see how it can possibly actually cap emissions growth, given the ongoing urbanization and other developments noted above, and Beijing does not accept international obligations that it does not think it is capable of meeting. Chinese quantitative obligations are, therefore, likely to focus on improvements in energy intensity per unit of GDP, perhaps bolstered by some sectoral requirements, along with targets on use of renewables. China cannot avoid an overall cap on carbon emissions indefinitely, but it is not in a position realistically to accept a cap at Copenhagen.

Economy highlighted the establishment of a greenhouse gas inventory and more effective emissions monitoring at the provincial level as “an essential first step” and a ripe area where the U.S. can lend assistance. Rural areas (which form the majority of China) in particular, Economy would note later in her testimony, lack any capacity to measure and report emissions.

Second, Economy recommended helping Chinese companies to set up a greenhouse gas registry. She described the work of a Chinese organization (without explicitly identifying which one) that she’s on the board of that reviews sustainability initiatives of businesses in China, both multinational and domestic. According to Economy, over twenty Chinese companies voluntarily stepped forward expressing interest to participate in the program, with 5 or 6 of them actually possessing greenhouse gas mitigation goals, although nothing too sophisticated. This, to me, points on one hand to an appetite by Chinese enterprises to improve competence in emissions monitoring and reporting, but on the other, a serious lack of capacity to do so.

Third, verification is important area with much room for improvement because of the lack of incentives to enforce laws, poor data collection and a lack of transparency–there is a pervading incentive to hide negative information in China, she noted. One example she raised is building codes in China, where the compliance rate is a paltry 5%, which is alarming especially considering the fact that half of all the world’s new construction is taking place in China. She also mentioned that California was working with a few provinces on a climate governance initiative to develop information sharing capabilities and promoting accountability at a local level.

Economy astutely observes:

Technology doesn’t matter, unless the political system and economic system is there to support it [GLF note: sound familiar? See previous post "Technological innovation as a panacea? Bah hambug!"] When I speak with U.S. companies…what they talk about in their dealings with China is contract sanctity and enforcement and certainty of regulation. And that all takes us back to governance and capacity building.

Also worth considering is Economy’s prepared statement (see pg. 6) in which she hilighted three broad categories of weaknesses that will potentially undermine any effort for MRV climate action in China-(1) weak implementation of and compliance with environmental law, (2) weak capacity to monitor pollution, (3) underdeveloped climate modeling capacity.

In Economy’s view, the most effective way forward is to focus at local levels in cities or regions that want to engage in capacity building for MRV. Economy explained that there were certain test areas for such capacity building that the central government has in mind, but may not correspond to the most progressive localities. Such an approach would be knocking one’s head against the wall, she said. Instead, Economy recommends that efforts should be focused on the top 10% of cities that are or aspire to be “national model cities” in order to gain the most traction. But because of the enormity of the challenge, Economy pleaded patience and perseverance, urging that any US-China partnership must take the long term view of “ten to twenty years.”

Where are you coming from?

Kerry raised the question of whether it was possible for China to commit to measuring and verifying carbon emissions reductions at Copehagen. Economy expressed doubt about the ability to obtain an accurate baseline on emissions for reasons described above, despite the existence of estimates by various sources (see, e.g., CARMA) because these estimates are based on energy inputs but may not take into account emissions from sources such as methane from soil, for instance. Chandler took a slightly different view, going as far as saying that the MRV issue in China was in his opinion “a little overrated” because there are many things that can in fact be measures-investments into the energy sector is tracked, there are meters on wind turbines to measure electricity generation, and the amount of coal consumed is reported, he cited just by way of examples.

Lieberthal took the middle-of-road position, saying that he believed China is providing the best numbers that they have and that the general trends of national data is correct even though absolute numbers may be off due to distortions in reporting up the vertical hierarchical chain of bureaucracy (village->township->county->prefecture->province->central government). Lieberthal emphasized that there is strong desire by national leadership to strengthen the quality of their numbers, and that the U.S. should start cooperating with China on energy projects right away as such cooperation would give the U.S. access to these numbers and thus put both parties in a better position to collaborate and improve the quality of statistics.

So what now?

To sum up the main message of the hearing, it seems compelling that capacity building in monitoring, reporting and verification should be elevated to a priority agenda items for US-China cooperation. Simply put, you can’t manage what you can’t measure. But a culture of transparency and accountability is not something that most people would ascribe to the Chinese political system. I’ve warned in a previous piece that:

Moving towards a system of open information and transparent reporting, let alone accountability, will require a real cultural shift. Building the capacity to accurately collect and report emissions data – potentially politically sensitive for Chinese institutions – will be a long and gradual process that must reach into the provincial and municipal and local levels… Cooperative efforts like the pilot carbon registry in southern China are fantastic starting points because they demonstrate success at a smaller local level. As the Chinese become more comfortable with the concept of an accountable carbon registry, such efforts should be extended, accelerated, and replicated in other parts or sectors of China.

Another concrete measure that in MRV collaboration would be in the area of Continuous Emissions Monitors (CEMs)-systems that measure pollutants such as SO2, NOx and CO2 in real time and transmit the data to a government data center-for power plants. Based on my conversations with people on the ground in Beijing, China has CEMs on 85% of power plants but they simply don’t have protocols in place for maintaining CEMs and verifying data. Interestingly, the US required CEMs in its 1990 Clean Air Act, and they were installed and protocols put in place within a few short years. Helping Chinese power plants implement protocols for operating their CEMs would be low hanging fruit to set China on the course for MRV.

To conclude, it is fair to say that MRV is a highly important issue that should feature prominently in the minds of those seeking for meaningful cooperation with China, but should be approached with political sensitivity and with a menu of specific, concrete projects, such as pilot GHG registries or implementing robust CEMs protocols, strategically targeting sectors and geographic regions that would be most receptive or could provide the most leverage for meaningful MRV. As these projects gain traction and scale should follow.

Comments (3)

The EPA recently ruled that greenhouse gases are harmful and are subject to monitoring. It is unclear to me whether they ruled this because greenhouse gases cause global warming, which is harmful, or if the greenhouse gases themselves are harmful for humans to inhale. If the reasoning is the former, then they should not only monitor emissions from us factories, but also estimate the emissions on imported products and fine those accordingly. If this were the case, independent monitoring groups would have to certify the factories overseas for US importers.

[...] may be suspicious of whether China is actually achieving the results they claim (see Julian’s previous post “Senate Foreign Relationa Hearing: China will not accept caps but must be pushed to MRV“). [...]